Following the first round of layoffs in February last year, Mercedes-Benz China has launched another major workforce reduction in less than a year and a half. According to multiple media reports, Mercedes-Benz is pushing ahead with a new round of structural layoffs, planning to reduce the headcount at Beijing Mercedes-Benz Sales Service Co. from around 900 to fewer than 600. The layoffs are said to be taking place in two steps: the first batch currently underway covers 10% of staff, with a severance package of N+6. The second round of layoffs is scheduled to start by the end of this year. After both rounds, the total workforce at the Mercedes-Benz sales company will shrink from roughly 900 to below 600. Mercedes-Benz VLE EV The job cuts did not come without warning. As early as 2025, Mercedes-Benz initiated a global reduction of indirect positions, seeking to lower its massive labor and administrative costs through headcount optimization. The goal is to save about 5 billion euros per year by 2027. Notably, compared with last year’s generous terms, the compensation for this round of layoffs has significantly “shrunk”. During the first wave of layoffs in February 2025, the severance package was N+9. Employees who signed on the spot could receive an additional three months’ salary, and those who did not find a new job within two months could continue to receive two months of transition pay, bringing the maximum compensation to N+11. This year, however, the signing bonus and transition pay have been canceled, leaving only the basic N+6 compensation. The “discount” on the severance package reflects the mounting operational pressure Mercedes-Benz is facing in China. Data shows that deliveries in 2024 reached 714,000 units, down 6.7% year-on-year. In 2025, deliveries plunged to 575,000 units, a 19.3% decline year-on-year, marking a five-year low. Entering 2026, the downturn has not eased: first-quarter deliveries stood at just 111,600 units, down another 27% year-on-year – far exceeding the 6% global decline average. Alongside falling sales, profits have shrunk sharply. Mercedes-Benz’s global net profit in 2025 was 5.331 billion euros, halved by 48.8% year-on-year. In the first quarter of 2026, net profit was 1.433 billion euros, down another 17.2% year-on-year. As Mercedes-Benz’s largest single market globally, China’s continued slump has become the biggest drag on the group’s earnings. Benz CLA Facing the twin pressures of consecutive sales declines and plunging profits, Mercedes-Benz is attempting to “rescue itself” through a series of aggressive measures. In addition to layoffs and personnel changes in China, the company has closed overseas assets such as its plant in Argentina to trim its footprint, while Germany is also pushing ahead with large-scale workforce optimization. On the product front, in 2026 Mercedes-Benz plans to launch more than 15 all-new and facelifted models in the Chinese market, covering all mainstream luxury segments. The brand has also announced it will introduce seven China-exclusive new models by 2027 and is jointly developing an advanced driver assistance system with local tech firm Momenta.